ONE THING THAT WAS MADE VERY CLEAR DURING THE EARTH SUMMIT in Rio in 1992 was the inseparable link between economics, poverty, and environmental degradation. The human and ecological tragedies overwhelming Somalia, Haiti, Nepal, and Bangladesh are a canary’s warning to the rest of the world, while the economic and industrial plans of India, Brazil, China, and the former Soviet Union and its allies have vast implications for the planet’s ecosphere.
Foreign aid is not a frill or indulgence of the rich countries but a necessity to ensure a future for our children. Susan George is an economics analyst who specializes in the developing countries. In her books How the Other Half Dies (1976) and A Fate Worse Than Debt (1988), she makes a powerful case that the misery of the “South” is created by global economics. George believes the current faith in the global economy is a religion based on dogma that obliges “everyone to believe in this doctrine in order to be saved.” The problem is that “We’re letting the economy be outside the ecology and do whatever it likes. The economy has become the guiding principle … powerful institutions like the World Bank and the International Monetary Fund are in a position to say if you don’t believe our doctrine, you will not be saved. You will have no new loans. You’ll have no opportunity to participate in the world system.”
The reason economics is a disaster is that it isn’t founded on the finite limits of a biophysical world. The economic institutions created by the rich countries are failures: “People are more miserable. More people are marginalized. More people are excluded. More people are going hungry. And they’ve even failed in financial terms. The debt is much greater than it was when they began imposing all these systems.”
In George’s opinion, “We are waging war on the Third World. The debt has become an instrument to keep these countries under control.… It is a political tool which has obliged all of the debtor countries to toe the line and to do the will of the northern creditors. It’s much more efficient than colonialism.”
Now consider George’s devastating analysis of what the global economy has already done for the South:
In 1982, the whole of what is still called the Third World, the southern hemisphere, owed $900 billion in debt. From 1982 until the end of 1991, that’s 10 calendar years, these countries paid back $1.496 trillion in debt service. Their only reward for paying back that amount of debt was to find themselves owing $1.478 trillion, an increase of 64 percent over what they owed in 1982. In other words, you can’t win.
If you take the debt of subsaharan Africa over that same decade, you find an increase of 123 percent in spite of the fact that sub-saharan Africa somehow, and at enormous human costs, scraped together nearly a billion dollars every month for its creditors. Subsaharan Africa, according to the OECD, paid back $950 million on average every month for 120 months between ’82 and the end of ’91. And their reward is to be 123 percent more in debt than they were 10 years ago.… The very poorest, too, paid back $300 million a month, every month. And they’re 150 percent more in debt than they were. So you simply cannot grow out of your debt.
[All figures in U.S. dollars]
That statistic echoed Brazil’s lament that in the last three years of the 1980s, $50 billion was exported merely to service the interest on its debt.
How did we arrive at such a state? In the 1960s, the transnational corporations began pushing into the poor countries by offering a dazzling array of goodies under the rubric of “development.” Consequently, George says, “every country in the world is being encouraged or, indeed, forced to integrate into the world economy instead of finding our major necessities of life at the local level or the regional or the national level. We’re first going to the international economy and then coming down towards the local and the domestic.”
This pattern represents a complete reversal in the way societies have operated in the past when the focus of attention was the local community. All people “got their major necessities from the local, domestic arena, then the slightly larger regional, then national. And finally, if necessary, they would go to the international level. You don’t have enormous transport costs or ecological costs. You certainly don’t have this integration of so many Third World countries on such inhuman and unremunerative terms that they have now.”
George’s thesis echoes that of World Bank senior economist Herman Daly, who believes that the thrust toward the global economy is exactly opposite to what we should all be doing. To Daly, transnationals undercut community values such as social justice, equal opportunity, sustainability, or happiness with their focus on obtaining short-term returns and maximizing profit. As Daly says, “The community is the level at which people actually know each other and in which they are able to make decisions and feel the consequences of those decisions.”
Susan George believes we can begin to change this destructive bent by bringing “the major needs for not only our physical lives but our cultural lives much closer to home.… Think locally in order to act globally.… To save things everywhere, you’ve got to start by saving them somewhere.” In the short run, that injunction may cost more but will bring long-term benefits to the community.
In spite of her devastating analysis of the crippling effect of debt on the South, George sees rays of hope: “People are reacting. People are not taking this structural adjustment lying down.… They are forming their own groups to combat this. NGO [nongovernmental organization] activity has never been so strong in the Third World. There are 1,600 different environmental groups in Brazil who came to the Rio conference.… The creativity of these groups in the South absolutely puts us to shame. They have a lot of inventiveness.” George recommends that we in the rich countries support this creativity and the local priorities of Third World NGOs.
The fate of the poorest countries of the world has a direct effect on us through what George calls the Debt Boomerang. We are feeling the effect of the South’s debt because “they’re selling off their forests and that means that we are losing a climate stabilizer. When the trees go, that means that global warming is going to increase. It means that biodiversity is going to go.” And globalization of the economy has meant that “in the United States, the job loss, directly due to the debt crisis, has been in the order of two million jobs at a very conservative estimate and in Europe it has been at least three-quarters of a million jobs.”
Constant repetition of the mantra of growth, competitiveness, and globalization keeps us from dealing with the underlying issues that Daly and George describe